Redundancy, loans affect coastal lines
Coastal shipping companies, which link scores of islands to the mainland and join Greece to Italy and thus the rest of the EU, are in danger of losing more than half their ships by 2008 because of a law banning older ships. This could cause serious problems in coastal transportation. As the sector has borrowed some 3 billion euros in the past five years (raising 926.4 million on the Athens Stock Exchange and another 2.05 billion from 36 banks in 12 countries), it appears very difficult for companies to borrow more money to invest in new ships. Gross profits for the five largest companies in 2002 were 172.4 million euros, of which 100 million went on servicing debts. A report by shipping consultant XRTC, drawn up for Credit Lyonnais, says that Law 2932/01, which demands that 30-year-old ships be withdrawn from service by 2008, will lead to a 68-percent drop in the number of ships plying domestic routes. This will entail an 88-percent reduction in passenger capacity (as the older ships carry more passengers than the new high-speed vessels), a 58-percent reduction in car capacity and a 62-percent reduction in the capacity to transport trucks. Trucks are the lifeblood of the islands, bringing in imports and getting products to the mainland and foreign markets. According to the law, by December 2005 all conventional ships that are 35 years old will have to be withdrawn, by December 2006 this will apply to those that are 34, in 2007 those that are 32 and by December 2008 those that are 30. Giorgos Xyradakis, the report’s author, noted that this will have a negative effect on the eight biggest companies, with four of them being in danger of having no conventional ships at all by 2008. The main shipping companies – which cover 90 percent of national shipping transportation – have a total of 123 ships (both conventional and high speed). Of these, 95 ply domestic routes and 28 the Adriatic. Annual traffic in the Aegean comes to 18,350,000 passengers, 1,560,000 cars and 566,000 trucks and in the Adriatic 2,498,000 passengers, 2 million cars and 979,000 trucks. Shipping sources believe these figures will rise.
